Digital-Advertising Startup Kauli Planning Tokyo IPO Next Year

March 18 (Bloomberg) -- Kauli Inc., a Japanese digital-advertising company, is planning an initial public offering on
the Tokyo Stock Exchange to finance expansion in the U.S. and
Southeast Asia.

The Tokyo-based company is seeking to go public by March
next year, Chief Executive Officer Katsuhiro Takata said in a
March 14 interview at his office. Kauli may seek a valuation of
more than 30 billion yen ($295 million) in the offering, said a
person with knowledge of the matter, who asked not to be named
because the information is private.

“The Twitter and Google acquisitions signaled growing
demand for the area of digital-ad technology and gave us a push
to expand in this business,” Takata, 36, said. “At the same
time, it’s a business we’ve got to evolve and upgrade in a short
period of time to survive.”

Twitter acquired MoPub Inc. last year for about $350
million in a deal that added real-time bidding to the
microblogging service’s ad platform, people with knowledge of
the purchase said in September. Google bought ad exchange
operator AdMeld Inc. in 2011 for about $400 million.

Takata declined to comment on the potential IPO valuation.

Rising Spending

Investors in Kauli include D2C Inc., a marketing firm
backed by Dentsu Inc. and NTT Docomo Inc., Japan’s largest
wireless operator, according to the company’s website. Other
backers include Draper Nexus Venture Partners and GMO Venture
Partners Inc., the website shows.

Kauli plans to expand in the U.S., South Korea, Vietnam and
Indonesia in coming years, said Takata, who founded Kauli in
February 2009 after earning his doctorate in computer science
from Tokyo’s Hosei University.

Japan’s Internet-advertising spending more than doubled in
the eight years through 2013 to 938.1 billion yen, driven by an
increase in usage of smartphones, according to a Feb. 20 report
from Dentsu, Asia’s biggest advertising firm.

The country’s total advertising expenses, including on
newspapers and television, rose 1.4 percent in 2013 to 5.98
trillion yen, the Dentsu data shows.

Kauli, which doesn’t disclose earnings, doubled its
headcount over the past year to 42 and plans to expand it to 60
in the next 12 months, Takata said. The company has about a 20
percent share of Japan’s Internet ad market, which serves about
100 billion impressions monthly, according to Takata.